Thursday, February 5, 2015

Knowledge Mobility is Important for Social Mobility

In order for social mobility to remain viable, knowledge use dispersal beyond today's prosperous regions is a big part of the equation. But why is this the case? Applied knowledge in action, is today's primary resource use pattern. One could visualize knowledge use as the soil of a garden, by which every product imaginable could (potentially) grow.

For a long time, land use starred in the primary role of resource generation. In recent centuries, the factory floor shared a starring role as well, before product could be generated with less labor. Ample choice in land use and tradable goods production, increased growth and social mobility - so long as labor and skills sets remained interchangeable options.

Divisions of labor in traditional production were created in part so that interchangeability remained possible. These flexible time use options were a major contributing component to productivity. Hence divisions of labor in factory work are different in nature, from arbitrarily fixed and less productive divisions in some knowledge use capacity. Indeed, breaking free of the high skill requirements of earlier guilds, meant more choices for populations as a whole. Increased time use specialization in a singular capacity - then as now - was capable of stalling mobility patterns and economic growth in general.

If knowledge could also be utilized as interchangeable components in the present, productivity gains would mean that lower income levels would have access to important services formation otherwise not be possible. Greater services output would be generated. Since individuals would rely on skills portfolios instead of single skill sets, less risk would be involved for the costs of moving to locations where knowledge use systems exist.

As knowledge use increasingly separated between high and low skill sets, living quarters mirrored this change as various income levels have become more geographically dispersed. Segregation in work and living environments has been the result, making it more difficult for many forms of enterprise to remain in close proximity to one another. Even the factor of wide income variation, contributes to decreased mobility.

At the same time nations are also limiting mobility across national boundaries. A major reason for government reluctance to accept immigrants, is that existing services marketplace capacity is already being stretched for local citizens. Which is more problematic: the income divide, or the growing difficulty of moving beyond one's personal economic circumstance? Carola Binder's response to an article from Gregory Clark suggests that while some measure of equality is desirable; so too, is mobility. Here's Clark:

We cannot change the winners in the social lottery, but we can change the value of their prizes.

But how does one think about this? How can knowledge use become a more substantial component of the marketplace, without affecting the integrity of today's limited high skills services environment? For one thing, there needs to be a better understanding of the knowledge sets which specifically belong to present day institutions, and the vast array of earlier knowledge gains which remain open for new knowledge use systems to build from. Even though much is under patent, it's too easy to forget the vast amount that could be tapped into by anyone.

What's more, patent thickets have considerably slowed down economic growth in real terms. There's an odd sort of knowledge use standoff in all this. In a recent post, James Pethokoukis writes, "If government doesn't do basic science, don't expect business to." Even though monetary activity has recently increased relative to fiscal activity, this hasn't translated into research gains. In a recent paper, Packalen and Bhattacharya note that innovation in major cities has slowed, which is surprising since prosperous regions are the main "idea centers" of the present.

In an era when knowledge use reigns supreme, the high skill meritocracy could be considered the new nobility. However it is not easy to add further taxation to high incomes, in an attempt to address wealth disparities. Not enough redistribution would result, for lower income levels to gain needed services from today's current providers. Equally important is the fact that knowledge wealth for the elite does not come easy. Not only are the costs of economic access quite high, these professions involve a high level of lifetime commitment.

A better approach to maintain social mobility and growth potential is to make knowledge use possible through more flexible means. Knowledge use which relies on time coordination instead of merit, would mean that individuals have a choice for production and consumption of primary services, when it is not possible to access existing services networks.

There is nothing wrong with the human desire for meritocracy, for it is capable of delivering tremendous rewards. Who - given the chance - doesn't want the best surgery that "money can buy"? Except it is not always possible - or realistic - for all of society to expect a form of service delivery that requires decades of education and debt loads. The main drawback to meritocratic knowledge use as the only service option, is that others need to have similar merit in knowledge use capacity to approach time coordination on the same terms.

It is possible to gain benefits from coordinated time use at multiple levels. Some knowledge use systems would gradually prove capable of generating research which rivals institutions that approach education in linear context. Eventually, new systems would mean being able to work with the resources in one's own environment, even in the most rural of settings.

Equal time use is certainly not for everyone. Coordination for services through monetary means will always be easier. The only problem is that services through price coordination alone means a permanently limited market, because of its secondary nature to primary wealth. Time arbitrage turns services into primary wealth, and in so doing opens up a marketplace which otherwise isn't possible. What's more, time arbitrage may be the best means to maintain balance in knowledge use and resource capacity for populations in general. Perhaps that's the best rationale, of all.